A group of 29 Illinois Democrats, including two influential House committee chairs, have written to the Chicago City Council to urge members not to support Chicago Mayor Brandon Johnson’s proposed city tax on online sports betting.
In a letter addressed to the elected members of council, House Gaming Committee Chair Rep. Daniel Didech and House Revenue Committee Chair Rep. Curtis Tarver called the idea of adding yet another layer of tax onto online sportsbooks in Chicago “a flawed policy that sets a poor precedent [and] provides minimal fiscal benefit.”
Didech has already introduced legislation that would prevent Chicago from imposing Johnson’s planned 10.25% on operators’ adjusted gross revenue raised from online sports wagers placed within the limits of the Windy City. The bill, which Didech called a “direct response” to the City of Chicago’s plan, states that the regulation and taxation of sports betting are exclusive powers and functions of the state.
Some council members approve of idea
Mayor Johnson’s Protecting Chicago Budget plan for FY 2026 included the idea of a city tax on sports betting as one of several measures aimed at closing a $1.15 billion budget gap without increasing Chicago property taxes. He formally put forward the suggestion after it was mulled by City Council members earlier this year, with some supporting the notion.
Johnson is required to submit budget recommendations to the City Council for formal approval, with a deadline of Dec. 31. A budget needs 26 of 50 votes there to pass.
But many others sound the alarm
However, the group of House representatives led by Didech and Tarver warned in their letter that the idea would generate only around $26 million in extra revenue and could prompt other Illinois municipalities to do the same. They fear the net result would be to drive state residents towards the gambling black market, ultimately costing Illinois both financially and socio-economically.
“From a policy standpoint, the proposal is deeply problematic,” they wrote. “The City of Chicago’s proposal sets a dangerous precedent for more than 200 home-rule municipalities across Illinois. The ripple effect could extend far beyond gaming. These types of policies could open the door for a patchwork of local taxes in other state-controlled policy areas, making enforcement and compliance nearly impossible.”
The representatives also accused the City of Chicago of failing to consult meaningfully with state Assembly members, “leaving legislators, even members who represent the City of Chicago, with no choice but to oppose the measure.”
Illinois sportsbooks already pay big
The legislators also noted that the proposed 10.25% city tax would add to the burden already shouldered by online sportsbooks that are operational in the Chicago area.
Since July 2024, Illinois has taxed online sportsbooks’ AGR on a sliding scale of between 20% and 40%, up from the previous flat rate of 15%. The state also charges online sportsbooks 25 or 50 cents for every single sports bet they take, a measure which prompted all 10 online sportsbooks to implement either a customer surcharge or a new or increased minimum bet stake in the state. Meanwhile, Cook County, which includes Chicago, taxes operators at 2% of AGR.
Eilers and Krejcik Gaming analysis found that, had all those taxes including the proposed Chicago tax been in effect during the 12 months ended August 2025, FanDuel and DraftKings would both have paid an effective tax rate in Illinois of more than 50%. Virtually every online sportsbook would be paying an effective rate of over 30%.
The Sports Betting Alliance (SBA), comprised of those two leading sportsbooks as well as Fanatics, BetMGM and bet365,wrote in a statement in November that the proposed Chicago city tax would make it even more expensive to bet in city limits and drive more Chicagoans to the illegal market.
The representatives agree. “Illinois now has one of the highest sports-betting tax burdens in the nation,” they stressed. “For these reasons, we urge you not to support a budget that includes the proposed local sports-betting tax.”
